46 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 42 | 2024 Financial inclusion in Morocco Ben Murphy-Schmehl In recent years, Morocco has experienced double-digit growth in account ownership at formal financial institutions. Despite this expansion, use of these services is low. This accessibility–usage gap can be attributed to a cash-reliant economy, low levels of financial literacy, and negative perceptions of formal financial institutions. Strategies to address this gap lie in leveraging the familiarity of informal financial systems to introduce financial products in line with the needs of the Moroccan unbanked population. Introduction While financial inclusion has become a global priority in countries with significant unbanked populations, Morocco has stood out for its remarkable growth in bank account ownership. This improvement can be attributed to cooperation between important public actors, especially Bank Al-Maghrib (BAM) and the Ministry of Economy and Finance (MEF). Financial inclusion encompasses access to a wide range of formal services from well-regulated, formal institutions, such as checking and savings accounts, insurance, credit, loans, and equity (Demirguc-Kunt et al., 2017). Inclusive finance further extends to ensuring that small and medium-sized enterprises and microfirms enjoy access as well. In addition to potential macrolevel growth derived from formal financial activity and enterprise development, availability of these services at the individual level contributes to creating assets and wealth for poor households, potential for self-employment, improved ability to manage personal financial risks, and possibilities for consumption smoothing. These all may contribute to higher standards of living through eventual investment in education and business and improved nutrition and health (Demirguc-Kunt et al., 2017; World Bank, 2022). Although more Moroccans are account holders and more services target underserved communities than in the 2010s, use of these financial products is low. Rather than reaping the benefits associated with maintaining personal funds in formal financial institutions, accounts are maintained primarily to withdraw and deposit cash (E. Asmar, interview, October 25, 2023). Even though account ownership rates and the development of mobile money infrastructure are widely used to evaluate the financial inclusivity of a nation, alternative financial mechanisms and systems that fit within the context of the Moroccan economic, social, and cultural circumstances may better serve individuals and households to manage their money and invest in the future. Background Like many countries, Morocco has struggled to provide sufficient financial access for its population (Ndoye & Barajas, 2022). Throughout the 2010s, financial inclusion of Moroccans—as evidenced by measures such as prevalence of bank accounts, insurance plans, and bank credit usage—has lagged behind the rest of the Middle East and North Africa (MENA) region. A 2014 assessment revealed sparse usage of formal financial services in Morocco. Only 28% of adults had a checking account; less than 15% received bank credit; and 24% had insurance, the majority of which was mandatory. Additionally, notable gaps were evident for underrepresented groups: women were 20% less likely to be using a financial product than men, and only 19% of rural respondents used a financial product compared to 53% in urban areas (Ruiz Ortega et al., 2014). In 2017, the World Bank Global Findex survey found that 43% of adults across the MENA region owned accounts at a formal financial institution, but just 29% of adults in Morocco did. Similarly, 31% of the MENA population had saved and 43% borrowed money in the past year, with Morocco lower, at 21.4% and 26%, respectively. These metrics suggest that many Moroccan individuals and households miss the benefits of formal finance. Despite Morocco’s underperformance in financial inclusivity throughout the 2010s, the period since 2017 has seen substantial improvement in common measures of financial inclusion. According to the World Bank Global Findex 2021, Morocco has had doi:10.18275/pbe-v042-008
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